Japan’s Nikkei 225 hurtled more than +3.25% higher today in its first day of trading for 2018. The top Nikkei performers included Tokai Carbon and Showa Denko K.K., up +7.81% and +6.54%. The huge boost was helped by the tech-heavy US Nasdaq closing above the 7,000 threshold for the first time (all three main US indicies saw record highs overnight).
Energy stocks in Asia were also helped by more Iranian oil supply worry. But the wider US positivity was impossible for Japanese traders to ignore. Away from Japan, Australia’s S&P/ASX 200 saw a new 10-year high, hitting 6,102 points.
Elsewhere there's concern from top tech companies on chip security. Severals flaws have the potential to make some systems open to hackers by tapping into a computer’s central memory. The problem is thought to be industry-wide. Cloud-based vulnerabilities also exist. The issue has hit Intel’s share price, down more than -3% yesterday.
Overnight sterling crept +0.06% higher to 1.3518 against the dollar while the euro rose +0.12% against the greenback to 1.2026. There remains growing positivity on the pound generally with more asset managers going ‘long’ on sterling, according to new comments from Morgan Stanley.
- UK FTSE 100 7,671.11 +0.30%
- DAX 12,978.21 +0.83%
- CAC 40 5,331.28 +0.81%
- Dow 24,922.68 +0.40%
- S&P 500 2,713.06 +0.64%
- Nasdaq 7,065.53 +0.84%
- Nikkei 225 23,506.33 +3.26%
- Gold 1,311.30 -0.55%
- Oil WTI 62.12 +0.80%
Debenhams issues profits warning on weak Xmas sales
In contrast to solid results from John Lewis (yesterday) and Next (Tuesday) it was the turn of Debenhams this morning – and the numbers don’t look so good. For the 17 weeks to 30 December Debenhams reports a -1.3% slip in crucial like-for-like sales. The first week of post-Christmas sales also disappointed – “below expectations”.
“The UK trading environment has continued to be volatile and highly competitive with weaker demand in some more discretionary areas,” Debenhams said. “The market has become more promotion-driven and we responded in order to remain competitive for our customers.” This means profits will likely be closer to £55-65m than £80m-plus as previously hoped.
Responding to competitor discounting Debenhams says it has managed inventory more tightly “through tactical promotional activity whilst flowing stock more efficiently. This is reflected in weaker gross margins,” Debenhams said. However Debenhams did see strong digital gains. Debenhams shares at 35.56p have been buoyed +2.4% in the last week thanks to better UK retail sentiment overall.
Whitbread chairman Richard Baker goes
Costa Coffee and Premier Inn owner Whitbread this morning announced that chairman Richard Baker will leave at the end of the financial year, 28 February. He will be replaced by ex ITV and Royal Mail boss Adam Crozier.
“We have a well established Chief Executive and Executive Team, a refreshed Board, and considerable momentum in delivering this plan,” Baker said. “This aligns with a personal intention I had, earlier last year, to progressively scale back my business responsibilities.”
Whitbread shares have leapt more than +10% in the last month helped by speculation that it could spin off Costa sooner rather than later. Costa is the biggest UK coffee chain and is growing internationally. Going ‘long’ on Whitbread over three years – down almost -17% in that time – hasn’t been so impressive.
Breaking news: German discounter Aldi reports record UK sales over Christmas worth £10bn helped by strong sales of its Premium range.